Instagram Story: The Rise of the #1 Photo-Sharing Application

Instagram's rapid rise is suggestive of a Venture Capital fairy tale, with the startup gathering tremendous momentum in a matter of short months. Software engineers just needed eight weeks to create the social media application for uploading photos and videos before it was made available on the iOS mobile operating system in October 2010. Facebook (META) bought the business for $1 billion in cash and stock in less than two years.

But like all excellent stories, this one also had its share of lucky accidents, failures, and successes, as well as conflicts and collaborations.

Instagram Story: The Rise of the #1 Photo-Sharing Application

History of Instagram

A new Stanford University graduate, Kevin Systrom was recruited by the travel advice business Nextstop in 2009. Systrom had previously interned at Odeo, a business that would later become Twitter, and worked as a corporate development assistant at Google (GOOG) (TWTR).

While working at Nextstop, Systrom learned to code on the side because he had no formal training in computer science. In the end, he created a web app prototype named Burbn, which was inspired by his fondness for quality whiskey and bourbon. Users of the Burbn app could check in, submit their plans, and share pictures. Even though location-based check-in apps were very common at the time, Burbn's photo-sharing feature distinguished out.

Venture Capital Funding

A key moment occurred in March 2010, when Systrom went to a party for Hunch, a Silicon Valley-based business. Two venture funders from Baseline Ventures and Andreessen Horowitz were introduced to Systrom at the event. They decided to meet for coffee to continue their discussion after he showed the app's prototype to them. After they first met, Systrom made the decision to leave his career and dedicate himself to Burbn. Within two weeks, he had secured $500,000 in seed money for his business venture from Baseline Ventures and Andreessen Horowitz.

Systrom was able to begin building a team to support his effort thanks to this seed funding; the first person to do so was 25-year-old Mike Krieger. Krieger, a fellow Stanford alum, had previously worked at Meebo, a social media company, as an engineer and user-experience designer. The two were known from their time as Stanford University students.

Pivot to a Photo-Sharing Application

After Krieger joined, the two revisited Burbn and chose to focus mainly on images taken specifically with mobile devices. At the time, they carefully examined the top photography apps. The Hipstamatic app caught the attention of Krieger and Systrom due to the popularity and interesting features that could be applied to photos, such as filters. Twitter user and Krieger saw possibilities in developing an app that connected a social media site like Facebook because it lacked social media-sharing features.

Burbn was reduced to just its photo, comment, and "liking" features as a step backward. They changed the name of their app to Instagram at that moment, fusing the words "instant" and "telegram." They also began focusing on improving the photo-sharing process. The software was created with the idea of being simple and requiring as little human input as possible. They spent eight weeks perfecting the software before giving it to friends to beta test and rate its functionality. They brought the software to release after fixing several bugs.

Launch of the iOS App

  • On October 6, 2010, the Instagram app was released, and then within one day, 25,000 users had downloaded it.
  • Instagram had been downloaded 100,000 times by the end of the first week, and by the middle of December, there were one million active users.
  • The iPhone 4, which featured a better camera, had newly arrived in June 2010, making the timing of the app's release opportune.

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